Date: 2025-10-23Category: Not ApplicableState: Union GovernmentCountry: India
Press Release: Consultation paper on "Regulatory Framework for differential distribution in Restricted Schemes and Venture Capital Schemes to facilitate blended finance and other fund structures"
**Executive Summary**
The International Financial Services Centres Authority (IFSCA) has issued a consultation paper on a regulatory framework for differential distribution in Restricted Schemes and Venture Capital Schemes to facilitate blended finance and other fund structures. This framework aims to enable fund managers to structure schemes with differentiated distribution mechanisms to promote sustainable and innovative finance in GIFT IFSC. Stakeholders are invited to submit feedback on the proposed framework by November 11, 2025.
**Key Points / Main Content**
* **Purpose:** To facilitate blended finance structures by enabling differential distribution within fund structures under the existing IFSCA (Fund Management) Regulations, 2025.
* **Vision:** To make GIFT IFSC the global hub for sustainable finance, aligning with the Prime Minister's vision and the Finance Minister's budget speech.
* **Framework:**
* Proposes a framework to enable fund managers to structure and manage schemes with differentiated distribution mechanisms.
* Aims to facilitate greater participation of diverse investor classes (institutional, philanthropic, and impact investors).
* Mandates safeguards to ensure transparency and investor protection.
* **Fund Management Industry Growth:**
* GIFT IFSC has witnessed robust growth in the fund management industry since the introduction of the regulatory framework.
* As of June 30, 2025, 177 FMEs are registered with IFSCA.
* Collectively, these FMEs have launched 272 schemes with aggregate commitments of USD 22.11 billion and cumulative investments exceeding USD 11 billion.
* **Call for Feedback:** IFSCA invites comments and suggestions from stakeholders, market participants, and the general public on the proposed framework.
* **Deadline:** Feedback must be submitted to IFSCA on or before November 11, 2025.
* **Availability:** The consultation paper is available on the IFSCA website at www.ifsca.gov.in
**Impact Analysis**
**Fund Managers:**
* **Impact:** Greater flexibility in designing blended finance vehicles and innovative fund structures, as well as the ability to structure schemes with differentiated distribution mechanisms.
* **Action Required:** Review the consultation paper, consider the proposed framework, and submit comments and suggestions to IFSCA by November 11, 2025.
**Investors (Institutional, Philanthropic, Impact):**
* **Impact:** Potential for greater participation in schemes due to differentiated distribution mechanisms, along with mandated safeguards to ensure transparency and investor protection.
* **Action Required:** Review the consultation paper and consider how the proposed framework might impact their investment strategies and opportunities.
**IFSCA:**
* **Impact:** Responsible for reviewing feedback and finalizing the regulatory framework for differential distribution in fund structures.
* **Action Required:** Collect, review, and incorporate feedback from stakeholders to finalize and implement the framework by the deadline (not in document).
**Market Participants and General Public:**
* **Impact:** Provides greater insight into potential investment opportunities within fund structures and blended finance.
* **Action Required:** Submit thoughts regarding the proposed framework to IFSCA by November 11, 2025.
Key Entities Referenced
Consultation Paper on the “Regulatory Framework for Differential Distribution in Restricted Schemes and Venture Capital Schemes to Facilitate Blended Finance and Other Fund Structures.”: A document by IFSCA proposing a framework to enable fund managers to structure and manage schemes with differentiated distribution mechanisms.
IFSCA (Fund Management) Regulations, 2025: Existing regulations under which IFSCA is proposing to enable differential distribution within fund structures.
International Financial Services Centres Authority (IFSCA): The unified regulator for financial services in GIFT IFSC, working to promote sustainable finance.
GIFT IFSC: A global hub for sustainable finance that IFSCA regulates.
Gandhinagar: Location of IFSCA office
PRESS RELEASE
Consultation paper on Regulatory Framework for differential distribution in
Restricted Schemes and Venture Capital Schemes to facilitate blended finance
and other fund structures
The vision of the Hon’ble Prime Minister of India, Shri Narendra Modi is to make GIFT
IFSC, the global hub for sustainable finance. Hon’ble Finance Minister of India in her
budget speech 2022-23 also mentioned that “Services for global capital for sustainable
& climate finance in the country will be facilitated in the GIFT City”.
As the unified regulator for financial services in GIFT IFSC, the International Financial
Services Centres Authority (IFSCA) has been working towards realizing this vision by
fostering a globally competitive and facilitative regulatory environment that promotes
sustainable finance. Over the past five years, IFSCA has undertaken several
measures to accelerate sustainable global capital flows, drawing from international
best practices while remaining focused on the unique requirements of developing
economies.
Recognizing the substantial capital requirements of India and other developing
countries to achieve their climate and sustainable development goals, IFSCA
continues to encourage innovative financial structures capable of mobilizing private
capital at scale. Current estimates suggest that India alone would require investments
in the range of USD 10–20 trillion to achieve its net-zero commitments and climate
objectives. In this context, facilitating blended finance structures that strategically
combine public or philanthropic capital with private investment to catalyse greater
private sector participation emerges as a key policy priority,
To this end, IFSCA has proposed to enable differential distribution within fund
structures under the existing IFSCA (Fund Management) Regulations, 2025, therebyproviding flexibility for fund managers to design blended finance vehicles and other
innovative fund structures.
The fund management industry in GIFT IFSC has witnessed robust growth since the
introduction of the regulatory framework. Within a span of just over three years, GIFT
IFSC has attracted a diverse set of domestic and global Fund Management Entities
(FMEs). As of June 30, 2025, a total of 177 FMEs have been registered with IFSCA,
collectively launching 272 schemes with aggregate commitments of USD 22.11 billion
and cumulative investments exceeding USD 11 billion.
In continuation of its efforts to promote sustainable and innovative financing
mechanisms, IFSCA has today issued a “Consultation Paper on the “Regulatory
Framework for Differential Distribution in Restricted Schemes and Venture
Capital Schemes to Facilitate Blended Finance and Other Fund Structures.”
The consultation paper proposes a framework to enable fund managers to structure
and manage schemes with differentiated distribution mechanisms, thereby facilitating
greater participation of diverse investor classes, including institutional, philanthropic,
and impact investors, while mandating certain safeguards to ensure transparency and
investor protection.
IFSCA invites comments and suggestions from stakeholders, market participants, and
the general public on the proposed framework. The feedback may be submitted to
IFSCA on or before November 11, 2025.
The consultation paper is available on the IFSCA website at www.ifsca.gov.in
Gandhinagar
October 23, 2025